Lax CPUC To Give Utilities Xmas Windfall

Commission laxity is turning energy efficiency into a windfall for the utility companies. Rewarding inadequacy with millions in unearned bonuses sends the wrong message, not only to the companies but to the public as well.

For Immediate Release From The Utility Reform Network

The California Utilities Commission has analyzed results of the customer-funded energy efficiency programs run by utility companies PG&E, Edison, SDG&E and So Cal Gas and found that the utilities failed to meet program goals. Despite that failure, Commission President Michael Peevey has proposed awarding them ‘incentives’ for the programs, directly boosting utility profits with a cost to ratepayers statewide of $62.7 million.

TURN and other consumer advocates oppose the undeserved windfall, which will drive up customer costs with no resultant benefits. "The CPUC should require more from the utility companies," said TURN executive director Mark Toney. "Commission laxity is turning energy efficiency into a windfall for the utility companies. Rewarding inadequacy with millions in unearned bonuses sends the wrong message, not only to the companies but to the public as well."

A CPUC administrative law judge agreed with TURN that the additional payments were undeserved. The judge said that the so-called incentives constitute"a cost to ratepayers that reduces the overall cost-effectiveness of energy efficiency programs without providing any offsetting value."

The judge noted that under a previous CPUC decision, customers are only required to pay incentives "to the extent that benefits actually materialize." Under that standard the judge determined that PG&E and the other utilities were not entitled to additional shareholder payments, having already received $143.7 million in advance of the CPUC determination of whether it was deserved.

"The utility companies are behaving like spoiled children," said Toney, "insisting that they should be gifted millions even though they’ve been naughty not nice. TURN does not believe they should have to be bribed to do the right thing, much less the wrong one."

Additional charges passed on to customers would be:

  • PG&E: $29.1 million
  • SDG&E: $5.1 million
  • SoCal Gas: $9.9 million
  • SoCal Edison: $18.6 million